The future of the european Union: UK Government policy

FEU 22

Written evidence from the Liberal Democrat parliamentary party committee on international affairs

Executive summary

·British membership of a European Union of peaceful, free democracies has brought us a huge range of benefits including jobs and prosperity both through free access to the EU’s internal market and through the EU’s collective weight in international trade negotiations. It has brought robust consumer rights and protections, justice and home affairs measures which help our police and security services to keep British people safer and more secure and greater environmental protection and it has generally magnified UK influence in the world. But EU institutions are not perfect and should be subjected to challenge and review.

·The obsessive focus by some on the worst aspects of the EU gives the British public a grotesquely distorted view of Europe. But British parliamentary scrutiny of EU affairs is itself inadequate and needs to be mainstreamed across departmental select committees. Ministers need to be questioned ahead of sectoral council meetings. More also needs to be done to increase British representation within the commission and across the EU institutions.

·No compelling case has been made for any alternative to full EU membership. Norway and Switzerland, by their own admission, have to comply with EU rules but are unable to shape those rules. This would be a bizarre way to try to defend British sovereignty.

·Rather than the exercise of a British veto, the December council was a decision by the rest of the EU to walk away from the UK and carry on with their negotiation in a different room. The key danger now is that the questionmark over Britain’s future place in Europe becomes a self-fulfilling prophecy as other member states start to overlook UK interests. But the government has rightly worked hard to rebuild key relationships and this must continue.

·A formalised two-tier model could relegate the UK to permanent second class citizen status in the EU with all the consequences this implies for British influence over the shape and fortunes of our continent and the seriousness with which we would be taken as a global player. We should retain top table status within the EU.

·The fiscal compact treaty should be incorporated eventually into the EU treaties along with safeguards and access guarantees for non-Eurozone countries like the UK but without those countries having to sign up to any aspect of the treaty itself.

Introduction

1.The Liberal Democrat parliamentary party committee on international affairs is a sub-committee of the Liberal Democrat parliamentary party. The committee is chaired by Martin Horwood MP with co-chairs Baroness Kishwer Falkner, Lord David Chidgey and Lord John Lee.

2.The Liberal Democrats believe that the UK belongs firmly at the heart of Europe. This political stance is built on our long tradition of internationalism and our clear belief that UK membership of a European Union of peaceful, free democracies is in the British national interest. Our membership of the EU has brought huge benefits in terms of jobs and prosperity through free access to the EU’s internal market and a uniform regulatory environment for EU-wide business, and through the EU’s collective weight in international trade negotiations, whether via the WTO or EU free trade agreement negotiations.

3.Membership of the European Union allows us extraordinary freedom to live, work, study and retire anywhere in the Union. It makes life cheaper and easier by, for example, driving down flight costs through competition, cutting phone and data charges, providing free access to EU-wide health insurance and putting in place robust consumer rights and protections. EU justice and home affairs instruments and minimum standards help our police and security services to keep British people safer and more secure from security threats and serious organised criminal gangs operating across borders, whilst also raising the standards of justice, and the protection of civil liberties and rights for our citizens wherever they are across the Union.

4.Collective European action enables the UK to pursue credible policies on cross-border matters of vital importance, whether it is energy security, combating climate change, boosting environmental protection or developing joined-up infrastructure networks. Collective EU action in foreign, development and defence matters can be an extraordinary magnifier of British influence in the world. We have included in the Annex to our submission a range of facts, figures and examples to illustrate some of these points.

5.The UK has driven forward an open, outward looking and liberalising agenda to improve the Union and increase the benefits it delivers for the British people and all Europeans. In an increasingly interconnected global economic and political system with shifting patterns of power and influence, EU membership has helped successive British governments to shape our own future direction and fortunes by actively helping to shape the future direction and fortunes of the continent of which we are a major part. In the process, the UK has been able to retain global player status, taken seriously in Washington, Beijing, Moscow, Delhi and Brasilia, in large part because we hold influence in Brussels, Paris and Berlin, the world’s largest single market and biggest trading bloc.

6.The EU is not perfect. Liberal Democrats believe as passionately in reform of the European Union as we do in reform of the UK’s political system. We want the EU to work and to work better. And as with any set of political institutions, the EU structures, systems and processes are in need of constant attention, regular challenge and review. We are convinced that there is considerable scope for cutting waste, achieving greater cost efficiencies and refocusing EU level spending on areas where it will add greater value to spending at a national level.

Public perception and scrutiny of European affairs

7.We want a more efficient, effective, transparent and accountable European Union helping to deliver a prosperous, progressive, liberal and outward looking Europe. But there is a tendency, sometimes an obsession, in many parts of British political and public life to focus on the worst of the EU. Too often, a picture is painted that is grotesquely distorted, riddled with myths and peppered with untruths. If our picture of British public life was equally distorted – if all the British public knew about the UK government, parliament and British politics was MPs’ expenses, party funding scandals, media scandals, and failed big budget projects - it would hardly be surprising if people questioned the value and purpose of the whole British political system.

8.We do want to see a more responsive, transparent and accountable Union, and we believe that some of the reforms necessary to achieve this need to occur at home. For instance, it is painfully clear to us that the Commons European scrutiny system needs urgent reform. In a post-Lisbon world, it is simply unacceptable for the Commons to rely on a single Scrutiny Committee and a system of ad hoc Standing Committees to scrutinise EU affairs. Such a setup is symptomatic of the widely held and misplaced view that Europe is a niche foreign policy issue and only of general interest when framed in terms of in/out or the future of UK-EU relations. While we welcome the Foreign Affairs Committee’s inquiry, it is in danger of falling into this trap as well, unless it is accompanied by a mainstreaming of EU foreign policy matters within the work of the committee.

9.The vast majority of MPs have little or no engagement with substantive EU matters at all. The level of understanding of how the EU operates and Britain’s role within it is staggeringly low and the awareness of EU policy developments practically non-existent. The European Commission’s 2011 Work Programme - the European equivalent of the Queen’s Speech - was given less than an hour’s debating time in an ad hoc standing committee some six months after it was published and when the bulk of the planned measures had already been introduced. If MPs handled the Queen’s Speech in this way, there would be outrage. EU matters need to be mainstreamed across the departmental select committees so that they can consider them early enough to influence government and commission thinking, question ministers representing Britain’s interests ahead of sectoral councils and focus on policy direction and how it relates to domestic policy and British interests, not just constitutional questions.

10.Equally, we are extremely concerned at the UK civil service’s capacity on EU matters and the long-term decline of British personnel in the EU institutions and the numbers successfully passing through the Commission concours. We understand that EU units across Departments have been among the first to see cut-backs, that the UK has never before been so under-represented amongst commission personnel and that only eight British nationals successfully passed through the concours in 2011. The lack of focus on this crucial area by successive governments needs to be urgently addressed. The British civil service and UK representation (UKRep) have some incredibly good people working on EU matters, and many talented British nationals work in the EU institutions. But we need to drastically increase Whitehall capacity and British representation across the EU institutions.

There is no realistic alternative

11.In the absence of any clear and compelling alternative vision to Britain’s full membership of the European Union, the only option for Britain is to remain at the heart of the European Union. Within the EU, we will retain the economic benefits, individual freedoms and advantages for British citizens, the enhanced ability to manage major cross-border issues and the geo-strategic advantages of increased global influence in an increasingly interconnected and competitive world.

12.There is no compelling case for an alternative relationship between the UK and the EU. The only realistic alternative to full EU membership is membership of the European Economic Area (EEA) along the lines of Norway or Switzerland. But this would clearly be detrimental to UK national interests.

13.In order to gain access to the single market as a member of the EEA, the Norwegian government has to implement the vast majority of the EU’s rules but has no say in deciding those rules. This ‘fax democracy’ represents a huge democratic deficit for the people of Norway. As a Norwegian Committee set up to consider the impact of EEA membership recently reported,
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Norway is as ‘Europeanised’ as the UK despite not being a member of the EU yet there is an enormous democratic cost to not having votes in the Council, MEPs in the European Parliament or a commissioner in the commission as the UK and all other member states do.

14.In our view, this would not enhance British sovereignty. It would leave the UK sitting on the sidelines as others went ahead and shaped the future of the continent without us. Without a British voice pushing for open markets, green governance and an outward-facing Europe, the EU could turn in ways that would damage all our collective interests. As the Prime Minister put it: "Leaving the EU is not in our national interest. Outside, we would end up like Norway, subject to every rule for the single market made in Brussels but unable to shape those rules. And believe me: if we weren’t in there helping write the rules they would be written without us – the biggest supporter of open markets and free trade – and we wouldn’t like the outcome."
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15.The case of Switzerland is very similar. Though the Swiss have tried to resist the rigid application of EU rules under the EEA and other agreements with the Union, the trend is very clear as the country has increasingly accepted that it is in its interests to apply EU rules given the importance of the Union for its own trade. Bern, by its own admission, has increasingly deferred to Brussels in the key areas of banking and trade. New hedge fund rules proposed in Switzerland are explicitly based on EU rules with additional Swiss rules - a Swiss form of gold-plating. And negotiations between the Swiss and the EU aimed at encouraging the Swiss to conform to "all the criteria" of the EU Code for Business Taxation are due to start imminently.

To what extent should the December 2011 European Council and its outcome be seen as a watershed in the UK’s EU Policy and place in the Union?

16.Prior to the December European Council, the major concern in Britain was that a caucus of Eurozone countries might stray into EU-27 matters, most importantly over the single market. This is a legitimate concern. But the outcome of the December council increased the risk of such caucusing rather than reduced it.

17.The UK was not asked to pool any additional sovereignty or power within the EU architecture. What we were being asked was to allow the Eurozone countries to enhance the debt rules that apply to them by amending the EU Treaties accordingly. Worryingly, and for the first time in our membership of the Union, all the other member states decided that they could not work with the UK in this regard. They had to find an alternative arrangement outside the EU Treaties and without the UK. Rather than being a British veto, this was a decision by the rest of the EU to walk away from the UK and carry on with their negotiation in a different room.

18.This broke the number one rule that has guided British policy on Europe for decades: that we should always seek to exert maximum British influence on decision-making inside the Union. And, far from protecting the City of London, it actually put the City’s interests, and broader British interests, more at risk not less. The outcome of the Council was a plan for a Fiscal Compact signed by 25 out of 27 member states (and we expect the Czech Republic to sign before long). Provisions for discussions and initiatives among the signatories are dangerously close to single market matters under Title IV of the Treaty and regular meetings among Eurozone and Eurozone Plus members will take place around European Council meetings. Unless the Treaty is embedded into the institutional architecture of the EU, the UK cannot fully rely on the protections and rights afforded to member states under the Treaties. The potential for caucusing among Eurozone or Eurozone Plus countries, and without the UK, on single market matters, especially financial services, remains clearer than ever with vehicles and legal scope for this to occur.

19.This risk is reinforced by the political impact of the December council, with British relations with our partners strained at a time of extreme anxiety for the Eurozone and broader EU. The UK’s reputation as a fully committed, reliable and trustworthy member of the EU has been questioned. It is far from rare to hear people openly speculate about Britain’s future in the EU, or about whether EEA membership may be a better model for us. The key danger in the short/medium-term is that the questionmark over Britain’s future place in Europe becomes a self-fulfilling prophecy as other member states start to overlook UK arguments and interests (regardless of their merits), and make other alliances over matters of core interest to the UK. The recent negotiations over the CRDIV Directive, a piece of legislation of crucial importance to us, saw the UK dangerously close to a position of 1 against 26, despite the merits of our argument. A by-product, perhaps, of the December council. And there are plenty more difficult negotiations to come.

20.All is not lost - far from it. The use of our observer status in the negotiations following the December council was wise, as was our decision to allow the use of the EU institutions which themselves are bound to protect the EU Treaties in full and thereby British rights and responsibilities. The UK is a highly valued member of the Union in many ways, not least for our free trade and liberalising instincts which chime with many other member states and the natural disposition of the European Commission. But also for our leadership in foreign and security policy matters, our excellent reputation on police and judicial co-operation, our strong climate change credentials and our rigorous scrutiny of EU proposals at a technical level to ensure they are workable.

21.The UK has rightly fought hard to rebuild key relationships and alliances on matters such as the European growth agenda, climate change and EU foreign policy matters. We need to redouble our efforts, maintain a flexible approach, generate new initiatives and ideas, deepen existing alliances and build new ones - especially with Euro "ins" - and maximise our influence while taking opportunities for good deals and trade-offs for the UK.

Between now and 2020, what institutional architecture should the UK seek for the EU? Should the UK embrace a formalised two (or more) –tier EU and start to develop ideas for multiple forms of EU membership?

22.A multi-speed Europe already exists. The UK is not a member of the Euro or of Schengen (though we participate in police and judicial cooperation aspects in the latter) and we have an opt-in on all justice and home affairs matters. The treaties also offer considerable safeguards for the UK and other member states on sensitive matters such as the emergency brake clauses, safeguards on the single market and new powers for national parliaments over subsidiarity matters. This flexibility has worked well for Britain and many other countries within the overall framework of the EU, while they retain the option of altering these arrangements according to their own interests. Denmark, for example, is considering moving from an opt-out on JHA matters towards a UK opt-in model, and many non-Eurozone states are committed to joining the Euro in the future.

23.The treaties’ enhanced co-operation mechanisms (the first use of which the UK pushed for in relation to the EU patent and patent court) was one amongst other innovations in the treaties. These offer a vehicle to preserve the rights and responsibilities of non-participants in specific areas of deepened integration.

24.However, a formalised two-tier model is not in the British national interest. It could relegate the UK to permanent second class citizen status in the EU with all the consequences this implies for British influence over the shape and fortunes of our continent and ability to project power and influence internationally. The non-Euro block is likely to decline in size so the idea of forming a non-Euro group to balance a Euro-grouping is fanciful. If the UK wishes to maximise its influence in the EU and retain global player status in world affairs, it is fundamentally in the national interest to ensure we retain top table status within the EU. We see grave risks of the ‘self-fulfilling prophecy’ if the UK openly starts to explore different forms of membership with the EU. The reality is that, in such circumstances, others might take that decision for us.

What is the relationship between the new ‘fiscal compact’ Treaty and the EU’s acquis? What impact might the conclusion of the Fiscal Compact Treaty have on other aspects of the EU and its policies such as the budget, enlargement, or CFSP?

25.The fiscal compact Treaty lies outside of the EU treaties, but is linked via the EU institutions and sets out political commitments among the signatories over the use of EU Treaty tools, such as enhanced co-operation, and positions such as on the enforcement of the new ‘six pack’ rules. Our primary concern over this structure is the potential for caucusing over EU-27 matters, most notably on the single market. Within the Fiscal Compact Treaty, this could occur through actions taken under Title IV of the Treaty. More broadly, the new opportunities for Eurozone and Eurozone Plus groupings of member states to meet to discuss matters under the Fiscal Compact Treaty could directly or indirectly impact the interests of the EU-27 or the single market. The prospect of this materialising depends to a large extent on the 27’s ability to find solutions to problems with the EU’s main architecture, and thereby on the attitude and approach of the UK and other member states.

Should the UK Government support the incorporation of the ‘fiscal compact’ Treaty into the EU Treaties? If it should, what demands and safeguards, if any, should it make its condition for doing so?

26.The ‘fiscal compact’ Treatyenvisages its own incorporation into the main EU Treaties within five years. This would be far more satisfactory than the current situation and clearly in line with British national interests. It would not mean that the UK itself would need to sign up to the debt rules included in the Treaty or to any other aspects of the Treaty itself. Rather it would, as was the original intention, enable Eurozone countries to tighten and apply greater discipline to their own debt rules by amending them within the EU Treaties. The UK and other non-Eurozone countries would be well within their rights to ask for a generic safeguard on single market matters (that is that they remain the exclusive preserve of the EU-27 and that the Compact will honour and not undermine existing single market rules), as well as access to future Eurozone and/ or Eurozone Plus meetings.

Annex

1.Creating British jobs and prosperity through the single market:

·The UK economy benefits from the single market alone (not including EU external free trade deals) to the tune of up to £90bn annually, or £3,300 per household every year (27m households in UK).
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·The EU’s single market gives British companies free trade access to the world’s biggest single market worth nearly £12tn in GDP and over 500 million consumers.
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·3.5 million British jobs are reliant on the EU’s single market. That’s one in every 10 British jobs.
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·50% of British trade, worth £450bn a year, is with other EU member states.
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·Over 100,000 British firms export to other EU countries, 94,000 of which are SMEs. 80% of all UK businesses think the Single Market delivers concrete benefits to them.
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Over 200,000 UK companies trade with the EU every year.
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·The growth in free trade within the EU has generated up to £3,300 in extra income per British household per year over the last 30 years.
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·Over 50% of foreign direct investment to the UK comes from other EU member states, and is worth £351bn a year.
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·Over 50% of companies investing in the UK cite the UK’s membership of the Single Market as a core reason for investing in the UK.
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·Full access to the EU’s single market makes the UK a magnet for foreign companies locating in the UK: Between 1998 and 2011, 603 major foreign companies chose to locate their European Headquarters in the UK.
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·An OECD and Bank of England study suggest that UK withdrawal from the EU would cut FDI into the UK by over a third and damage household incomes.
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·The UK is pushing to liberalise trade within the EU in new growth areas such as energy, digital, services and green tech. sectors. This could add over £650 billion to the EU economy, making the average UK household almost £3,500 better off each year.
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·EU enlargement is hugely economically beneficial for the UK by expanding the EU’s single market. The enlargement of 10 central and eastern European countries has seen UK exports to those countries treble over the last ten years to almost £12bn.

·The City of London and Edinburgh are the leading financial centres in Europe. Ensuring the UK retains its influence over financial services regulation is vital.

·The level of trade liberalisation in the EU is unparalleled anywhere in the world.

2.New opportunities, making life cheaper & easier for British citizens:

·Today, around 2.2 million British nationals are living in another EU member state – either working, studying, or in retirement. Around 50% live in Spain.
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·EU free movement rules allow British families to travel freely on holiday throughout the EU at any time in the year - some 25m Brits go on holiday to other EU countries every year.
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·EU rules allow for Brits to live and work anywhere else in the EU too. Some 260,000 Brits work in another EU country, an increase of more than 40,000 since 2005.
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·Under current and emerging EU rules, British nationals will be guaranteed to have their rights and protections respected in all other EU member states.

oE.g. the European Protection Order will ensure that British victims of violence who have a UK protection order will receive the same protections anywhere in the EU.

oE.g. the EU is in the process of passing a package of measures that will ensure that any British citizen arrested on the continent will have their basic rights guaranteed including the right to be fully informed at all stages of the process, access to a lawyer and translation rights.

·The European Health Insurance Card (EHIC) enables UK travellers to receive free or reduced cost healthcare when on a temporary visit to another member state. There are around 30.5 million UK-issued EHICs in circulation.

·EU competition and consumer rights laws have driven down prices, opened up markets for smaller businesses and boosted consumer protections.

·The average BritishUK consumer saves around £480 per person per year as a result of EU single market competition driving down price of goods and services.
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For example, British families and businesses now enjoy vastly reduced mobile phone roaming charges, cheaper flights and proper compensation when flights are delayed or cancelled.

3.Opening up markets for British businesses around the world:

·The EU is vital to opening up new trading opportunities for the UK around the world.

·By negotiating as part of the world’s biggest single market bloc, the UK is able to get much better terms and access than it would if it were negotiating by itself.

·For example, a recently signed EU Free Trade Agreement (FTA) with South Korea (a bigger market than Turkey or Indonesia) has virtually eradicated all tariffs barriers for EU exporters. It will bring £500m a year of benefits to British businesses.
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·The EU is in the process of negotiating a series of new FTAs including with India, Canada, Ukraine and South America which will deliver enormous economic benefits to British households and businesses. Completing all ongoing EU FTA negotiations would generate over £50bn for the economy.
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There are many others in the pipeline, including with Japan and the US which could bring enormous economic benefits to the UK and broader European economy.

·Below is a snapshot of some of the benefits from some of individual FTAs under negotiation:
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oEU-Canada: The benefits of this agreement to the UK could be approximately £423 million per annum in the short term;

oEU-India FTA: This agreement could produce benefits to the UK of approximately £2 billion over ten years;

oEU-Mercosur FTA: The Commission has conducted some research but there is not yet a published SIA;

oThe EU-Malaysia FTA and EU-Singapore FTA are important building blocks towards an EU-ASEAN FTA, which could bring benefits of up to £3 billion per annum to the UK in the long term.

·The EU is vital to delivering British objectives on climate change, energy security and generating a low carbon economy.

·The EU is a world leader in combating climate change. Collective EU action was crucial for establishing the Kyoto protocol. Strong leadership by the UK and the European Commission helped to keep a strong and united ‘Team EU’ position at the UNFCCC CoP in Durban in 2011 and secured a remarkable global commitment including all major emitters.

·The EU’s collective position to deliver a 20% reduction in emissions by 2020 is essential for securing a global deal on climate change. The UK is pushing for a 30% EU climate change target.

·The EU’s Emissions Trading Scheme is the biggest of its kind in the world and vital for combating climate change and generating low carbon growth.

·The EU’s new Energy Strategy is essential in delivering UK energy security by diversifying energy generation and supplies, driving through reductions in consumption, creating a fully functioning internal energy market and investing in an efficient European Supergrid.

·EU targets and actions stimulate investment in UK renewables and low carbon technologies, and generate British low carbon export markets across the EU.

·For example, a European Supergrid could generate tens of thousands of new British jobs in the offshore renewable industry, turn the UK into a net exporter of energy again and reduce the costs of investing in new offshore wind and marine energy by 25%.
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·Operation Golf, a joint operation between Europol, the Met and Romanian Police, broke up an organised criminal operating a child trafficking network in the UK and across the EU. In 2010, this saw 7 individuals arrested in the UK and the release of 28 children. In total, some 121 individuals were arrested under the Operation.
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·Through the European Arrest Warrant (EAW), in 2010 the UK extradited over 145 individuals from other EU member states to the UK to face criminal prosecutions for crimes they had committed here.
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·Over the last two years, the UK has used the EAW to extradite at least 71 non-UK nationals suspected of committing serious crimes in the UK. This includes 4 thefts, 4 robberies, 5 murders, 5 rapes, 6 child sexual offences, 9 cases of GBH and 14 cases of fraud.
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·This, of course, excludes British national extradited back to the UK for crimes committed in the UK. We note, for example, the extraordinary success of the Crimestoppers’ Operation Captura which has successfully seen the arrest and return under the EAW of 49 out 65 most wanted British nationals on the run in Spain.
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· Through EU action to enable transfers of data on convictions, the UK is now aware (previously unaware) of 276 British nationals who have committed offences against children across the EU.

·The Eurodac System helps the UK cross reference thousands of asylum claims in the UK with those in other member states.
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Since 2003, the EU’s ‘Dublin System’ has enabled the UK to remove over 12,000 asylum applicants to member states that are responsible for deciding their claims.
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·EU action via ‘Frontex’ at Europe’s external borders helps to combat illegal migrant flows into the Union, many of whom intend to travel to the UK.

·The EU’s Joint Investigation Team (JIT) has become a key vehicle for the British Police to operate smoothly with other national forces in pursuing lengthy and complex cross-border investigations. Since 2009, British Police have been involved in at least 15 JITs.
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·The recently operational EU Council Framework Decision 2005/214/JHA should enable the UK to ensure that hundreds of thousands of pounds worth of financial penalties issued for offences committed in the UK can be claimed back from individuals in other EU member states.
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·The EU’s Prisoner Transfer Framework decision, which recently came into force, should allow the UK to both improve rehabilitation outcomes and reduce the size of the British prison population by returning foreign national prisoners to the home EU member state. The transfer of the first batch of prisoners is currently in the pipeline.
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·The ongoing package of legislation to put in place minimum standards for victims rights, heavily inspired by UK best practice, will help to ensure that British victims of crime in other member states have their rights properly protected. The parallel package on procedural rights in criminal justice, also heavily inspired by UK best practice, are crucial for ensuring that the more than 3,000 British nationals arrested and tried in other member states every year are subject to high standards of criminal justice.
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Acting as part of a 27 nation bloc, representing the largest single market in the world, is a huge magnifier of Britain’s voice and influence in the world. Some examples:

·The EU’s biggest foreign policy success is spreading European values, peace, security and prosperity across the continent, most recently through enlargement in 2005 to include 10 new EU member states. The UK remains a leading proponent of further enlargement to the Western Balkans, Iceland and Turkey.

·The EU’s Neighbourhood Policy is essential to delivering UK objectives of stability and prosperity to countries on the Eastern-edge of the EU, and in supporting the transitions underway across much of North Africa and the Middle East.

·EU sanctions have a much greater impact than UK-only sanctions. The EU, urged on by the UK and others, recently agreed sanctions on all oil exports from Syria to help put pressure on the regime there. Syrian oil exports to the EU are 95% of their total oil exports and reports suggest that the impact of the sanctions is already being felt by the regime and the ruling elite.
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The EU has also enacted a robust sanctions package on Iran and Zimbabwe.

·Equally, removing EU sanctions, opening up normal diplomatic channels and relaunching aid flows are a huge incentive to positive reforms. Indeed, we saw this and the benefits it brings to UK influence overseas very neatly in Burma with the PM’s initiative to urge the suspension of sanction on Burma, this position being approved by EU Foreign Ministers, the EAS opening up a new office in Burma and the reopening of EU aid flows to the country.

·The EU remains the world’s biggest aid donor and will be crucial for delivering on the UK’s objectives of combating global poverty.
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·The EU’s trading power is vital for supporting poorer countries growth and stability. The EU, under a UK initiative, agreed an ambitious emergency trade relief package for Pakistan in the wake of the devastating floods in the country last year.

·The EU’s Common Security & Defence Policy (CSDP) is delivering in a variety of important areas to the UK and broader EU such as:

oThe large-scale rule of law mission in Kosovo to combat organised crime, corruption and deliver stability in the country;
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oOperation ATALANTA, a UK-led (commanded from Northwood) EU naval mission to counter-piracy off the coast of Somalia which has reduced the number of successful pirate attacks and protected over 500,000 tonnes of food aid.
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